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Assuming you have an inflation linker that pays an annual coupon of 2.5% every half a year and the real yield is 3%. What will
Assuming you have an inflation linker that pays an annual coupon of 2.5% every half a year and the real yield is 3%. What will be the price of the if it matures after 3.5 if you assume that the total inflation during this period was 5.5% ? Assume the principal is 100. Hint: Find the price without the inflation and then apply the adjustment as we did in class
103.76
98.35
102.76
104.2
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